politics
SEC and CFTC Agree to Divide Oversight of Crypto Assets and Prediction Markets
SEC Chair Paul Atkins and CFTC Chief Michael Selig have forged a cooperation agreement to end years of regulatory clashes over digital assets. The agencies are mapping clear boundaries, with the CFTC overseeing event contracts and the SEC leading on securities-based derivatives. New York Post reported that only one enforcement case has been filed so far despite widespread suspicious trading.
May 14, 7:07 PM·2m read1 source
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The SEC and the CFTC have brokered a jurisdictional peace accord to resolve long-standing turf battles that previously hindered regulation of crypto and prediction markets. Paul Atkins, the chair of the Securities and Exchange Commission, and Michael Selig, chief of the CFTC, have been meeting regularly to map out clear jurisdictional boundaries.
The two men share a long-standing working relationship in both regulatory matters and private practice.
Most recently, Michael Selig worked as the chief counsel of Paul Atkins’ Crypto Task Force before he was confirmed as CFTC chief late last year. Their cooperation stands in contrast to the Biden years, when the SEC clashed with the CFTC over crypto regulation. Under then-SEC chair Gary Gensler, the SEC took the position that nearly all digital coins aside from Bitcoin were securities.
The CFTC argued that most crypto fell under its watch as commodities, though Gary Gensler won most of those battles. The digital asset industry is now valued at $3 trillion. The new accord assigns the CFTC responsibility for event contracts on prediction market platforms.
The SEC will take the lead on derivatives in prediction markets of stocks and bonds that meet the legal definition of a security. So far, enforcement has been limited. The Department of Justice and the CFTC filed one enforcement case against a US Army intelligence officer.
The officer, Gannon Ken Van Dyke, allegedly used insider knowledge of the capture of Nicolas Maduro to earn $400,000 on Polymarket, according to the agencies. US regulators told On The Money "Stay tuned" when asked about the lack of enforcement cases on suspicious trades in futures and prediction markets surrounding the Iran war and other events.
